Duty-free shops chase Chinese holiday shoppers as Golden Week begins

Duty-free industry eyes Golden Week windfall

Shift toward independent travelers drives demand for K-products

Exclusive brands, payment perks rolled out to attract Chinese visitors

Lotte Duty Free's flagship store in Myeong-dong, Seoul [Lotte Duty Free]

South Korea's duty-free industry is rolling out the welcome mat for Chinese tourists ahead of China's National Day Golden Week holiday, strengthening brand lineups in K-fashion, beauty and food — categories that draw the most interest from younger visitors — and launching a string of purchase promotions.

Industry sources said Friday that duty-free operators expect both the number of Chinese customers and overall sales to exceed last year's levels during the National Day holiday period, which runs Thursday through Wednesday. A recent survey by Dragon Trail International, a Chinese travel market research firm, found that South Korea ranked first by a wide margin as an overseas travel destination, chosen by 20.1 percent of respondents. Flight bookings from China to Seoul for the Mid-Autumn Festival holiday (Sept. 25–27) and the National Day break jumped more than 50 percent year-on-year.

The industry is paying particular attention to the growing influx of free independent travelers, not just group tourists. At Lotte Duty Free, sales to Chinese independent travelers last month — which included the Mid-Autumn Festival holiday — surged 115 percent compared with the same month last year. As a result, independent travelers' share of Chinese customer sales more than doubled, rising from 19 percent in September last year to 42 percent this September.

Independent travelers, who tend to be younger consumers, generally avoid bulk buying and copycat purchases, instead shopping according to their own tastes and interests. The range of products they buy has also broadened beyond cosmetics to include K-fashion, K-food, watches and jewelry, alcohol and tobacco, and luxury goods. In line with this shift, duty-free operators are expanding their category and brand offerings to match Chinese shoppers' preferences.

Lotte Duty Free recently opened an exclusive store for HAZZYS, a premium fashion brand with strong name recognition in China, at its Myeong-dong flagship. It also launched an exclusive duty-free edition of Jung Kwan Jang's "Everytime Royal Hello Kitty Edition," featuring the globally popular Hello Kitty character, in a collaboration available only through Lotte. Shinsegae Duty Free has likewise been steadily adding exclusive and new brands that can only be experienced in South Korea, including an exclusive line of Isaac Toast sauces popular among foreign tourists.

The "Everytime Royal Hello Kitty Edition," a collaboration between Lotte Duty Free and Jung Kwan Jang, available exclusively in the duty-free industry [Lotte Duty Free]

Chinese tourists browse Shinsegae Duty Free's Myeong-dong store [Shinsegae Duty Free]

"Chinese customers are clearly moving away from bulk-buying cosmetics or specific popular products and toward choosing items based on personal taste and interest — a trend most visible among younger independent travelers," a Shinsegae Duty Free official said. "The range of purchase categories is diversifying, and we are seeing growing interest in trendy products such as K-beauty, K-food and K-fashion."

A Shilla Duty Free official echoed the shift. "During last year's National Day holiday, visits were dominated by Chinese resellers, so there was nothing particularly notable about the holiday period. This year, the pattern is shifting toward independent travelers, and we expect additional demand," the official said. "With continued interest in K-culture and the popularity of K-beauty, the cosmetics category is showing strong growth, and demand for domestic fashion brands and other products favored by independent travelers is also steadily rising."

Operators are also running a range of promotions to drive purchases. Shinsegae Duty Free has put together payment perks tied to Chinese payment platforms — up to a 5 percent exchange rate benefit through Alipay+, an Alipay+ lucky draw, a 50 yuan ($7) WeChat Pay coupon, and up to 300,000 won ($221) in additional duty-free points based on purchase amounts through UnionPay. A double-mileage promotion for Singapore Airlines KrisFlyer members and Shinsegae Duty Free members is also running through the end of next month, applicable to purchases completed and picked up within that period.

Lotte Duty Free is offering benefits tied to popular Chinese mobile payment services — WeChat Pay, Alipay and UnionPay — along with PRE-LDF PAY shopping credits during the holiday period. An exclusive industry offer gives shoppers a 50 yuan discount coupon when they spend 1,200 yuan ($179) or more via WeChat Pay, while Alipay users receive unlimited exchange rate benefits. Lotte has also partnered with the Myeong-dong Tourism Special Zone Council to give away gifts such as sheet masks to customers who spend 10,000 won or more at Myeong-dong merchants.

Shilla Duty Free is offering instant discounts and exchange rate benefits through Alipay+, WeChat Pay and UnionPay promotions during the National Day period. Its online duty-free China store is running a "Chugumi Festa" campaign, through which customers receive discount coupons — six types for the Jeju store and two for the online duty-free store — based on the results of a shopping-style personality test.

spa@heraldcorp.com